Aussie dollar continues to trade below US$0.64
Written by
Daily Currency Update
The Australian dollar is weaker this morning when valued against the Greenback currently trading at 0.6346 at time of writing. The Australian dollar exhibits a subdued performance in Friday’s session, pressured by a strengthening US dollar (USD). Markets anticipate the Federal Reserve (Fed) will shift toward a more hawkish stance after Wednesday’s interest rate cut. Australian dollar (AUD) is expected to trade in a 0.6350/0.6410 range. Last week Australia's unemployment rate fell to 3.9 per cent in November, down from 4.1 per cent in October. Bureau of Statistics (ABS) data show the number of people in employment increased by 35,600, while the number of unemployed fell by 27,000, in seasonally adjusted terms. In November, the Reserve Bank was forecasting the unemployment rate to creep up to 4.3 per cent by the end of this year, and for wages growth to keep slowing as labour market conditions ease. Economists say the chance of the RBA cutting interest rates in February have now been undermined again. Looking ahead this week and today we will see the release of the Purchasing Managers' Index (PMI) a survey of about 400 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. On Tuesday we will see the release of the Westpac Consumer Sentiment.Key Movers
The US dollar Index (DXY), which measures the value of the USD against a basket of currencies, trades neutral on Friday with some minor gains in the US trading session. The US dollar seems to get some traction due to rising US Treasury yields, which seem to be offsetting the fact that markets are practically pricing in a cut in next week's Fed decision. Last week on the data front there were 242,000 initial jobless claims in the week ending December 7, the weekly data published by the US Department of Labor (DOL) showed on Thursday. This print followed the previous week's print of 225,000 (revised from 224,000) and came in worse than the market expectation of 220,000. Further details of the publication revealed that the advance seasonally adjusted insured unemployment rate was 1.2% and the 4-week moving average stood at 224,250, an increase of 5,750 from the previous week's revised average. A measure of wholesale prices rose more than expected in November as questions percolated over whether progress in bringing down inflation has slowed, the Bureau of Labor Statistics reported Thursday. The producer price index, or PPI, which measures what producers get for their products at the final-demand stage, increased 0.4% for the month, higher than the Dow Jones consensus estimate for 0.2%. On an annual basis, PPI rose 3%, the biggest advance since February 2023. The PPI release comes a day after the BLS reported that the consumer price index, or CPI, a more widely cited inflation gauge, also nudged higher in November to 2.7% on a 12-month basis and 0.3% month over month. Following the release, economists generally viewed the data this week as mostly benign, with underlying indicators still pointing towards enough disinflation to get the Fed back to its 2% target eventually.Expected Ranges
- AUD/USD: 0.6250 - 0.6450 ▼
- AUD/EUR: 0.5950 - 0.6150 ▼
- GBP/AUD: 1.9650 - 1.9850 ▲
- AUD/NZD: 1.0850 - 1.1050 ▲
- AUD/CAD: 0.8900 - 0.9100 ▲